ark disrupt issue 84

ARK Disrupt Issue 84: AI, ICOs, Dashcams, and CRISPR

Please enjoy ARK Disrupt Issue 84. This blog series is based on ARK Brainstorming, a weekly discussion between our CEO, Director of Research, thematic analysts, ARK’s theme developers, thought leaders, and investors. It is designed to present you with the most recent innovation takeaways and to keep you engaged in an ongoing discussion on investing in disruptive innovation. 

1. AI Chip Startup Graphcore Raises $30m, Aiming for “Better than Volta” Performance


UK based Graphcore has raised $30m in a new round of funding for its upcoming artificial intelligence (AI) chip, dubbed Colossus. The deep learning boom has spawned a number of AI chip startups that aim to supplant NVIDIANVDA and Intel in the datacenter. Among them, Graphcore has one of the more ambitious designs. It manufactures its Colossus chip using the latest 16nm process, compared to the 28nm designs from GoogleGOOG and Nervana. It also claims that its performance will go “well beyond” NVIDIA’s flagship Volta GPU and Google’s TPU2. Graphcore plans to sample its chips by the end of the year and to enter mass production in 2018.

While bold PowerPoint claims should be taken with a grain of salt, the Graphcore team has a strong track record and influential backers. CEO Nigel Noon and CTO Simon Knowles were co-founders of Icera, the software-defined modem company that NVIDIA acquired in 2011. Investors in the latest round include some of the most respected people in AI: Demis Hassabis of DeepMind, Greg Brockman and Ilya Sutskever of OpenAI, and Uber Chief Scientist Zoubin Ghahramani.

Given the considerable expense required to bring a chip to market, Graphcore probably will be acquired. ARM, for example, would make an excellent parent given its need for AI expertise, as well as Softbank Chairman Masayoshi Son’s focus on the next wave of the Internet.

2. The ICO Market Has Gone Into Overdrive

Commonly known as Initial Coin Offerings (ICOs), cryptotoken sales have attracted attention as a novel method to fund blockchain projects. Preparing for an ICO, typically a team of engineers writes a white paper and builds a business plan, ultimately selling tokens for fractional ownership in the project. Each project is governed by specific rules enforced by smart contracts.

The number of ICOs issued in 2017 has been considerable, up nearly 1800% since 2014, as shown below. These projects have raised $1.2 billion, with $600 million in the last month alone. Tezos, EOS, and Bancor have been the biggest ICOs of the season, all deployed on the Ethereum protocol. Too much too soon?

ARK Disrupt Issue 84Source: Autonomous NEXT Analysis

3. The Dashcam Autonomous Strategy

This past week, two private companies made headlines with their dashcams and autonomous vehicle ambitions. lvl5, founded by two former TeslaTSLA engineers, has a dashcam app called Payver, which pays users $0.01-$0.05 per mile driven. lvl5 claims that its computer vision algorithm will process video footage and produce maps within 10cm of accuracy for autonomous cars. Interestingly, neither Uber nor Lyft has zeroed in on this strategy for collecting data.

For perspective, Tesla’s fleet of cars has processed more than five billion miles of data cumulatively, collecting video from 8 cameras as well as radar. As shown below, Tesla’s fleet mileage is rising exponentially and should skyrocket once Model 3 production ramps.

ARK DIsrupt Issue 84 Tesla

The second company, Nauto just raised a series B financing that included Softbank, GMGM, ToyotaTM, and BMW. Unlike lvl5, Nauto is selling the dashcam hardware. ARK finds it interesting that automakers are investing in dashcam companies when they could be integrating cameras directly into their cars.

4. CRISPR Can Play Many Roles

Lights. Camera, Action! For the first time in history, scientists have been able to store and playback data in living cells. Led by a team from the Harvard Wyss Institute, including George Church, scientists successfully hacked the natural bacterial immune system to record digital data like those presented in successive frames of a galloping horse, as shown below. This breakthrough has more profound implications for health care than just taking cells out to the movies with CRISPR.

Genome 1.pngSource:

Thus far, the scientific community is well aware of the CRISPR editing function using a nuclease known as Cas9, but has yet to highlight the role of the Cas1 and Cas2 proteins. The latter proteins can “record” invader genome sequences and integrate them into “CRISPR array elements.”

In the future, the team will focus on establishing molecular guidelines to record or “memorize” human biological information in real-time. Potentially, scientists will be able to trace the odyssey of our human genomes, with important ramifications for regenerative medicine.

The information provided is for informational purposes only. It does not constitute any form of advice or recommendation to buy or sell any securities mentioned. It is intended only to provide observations and views of the author(s) at the time of writing, both of which are subject to change at any time without prior notice. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on ARK's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Past performance is no guarantee of future results. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.